March 29, 2009

Only a few years ago many pundits–Western as well as Asian–were claiming that Asian nations had developed a new paradigm of economics, a superior alternative to Adam Smith’s capitalism. With the 1997 economic crisis, this view was stood on its head: it turned out that “Asian values,” a.k.a. crony capitalism, had made the region uniquely vulnerable to financial disaster. Now that some of the dust has settled, it seems clear that both views were utterly wrong. Instead of being some kind of alternative, Asia has been the proving ground for global capitalism, the place where both the potentials and the risks of the New World Order have been most fully revealed.True, the Asian Miracle of the 1980s was less miraculous than it may have seemed, but it did show that rapid economic development was possible, that you didn’t have to be of European descent to join the modern world and that the global economy offered huge possibilities for export-led growth. To put it another way, the global economy was not, as so many “dependency” theorists had claimed, rigged against latecomers. On the contrary, it offered the opportunity for countries like South Korea to achieve two centuries’ worth of economic progress in little more than a generation. And that discovery energized not only the Asians but capitalism in general.

But while Asia’s growth has restored capitalism’s luster, its instability has revealed that capitalism has not lost its old self-destructive tendencies either. Leaving aside the dress rehearsal in Mexico two years earlier, in 1997-98 Asia experienced the first postmodern financial crisis: a high-tech, globalized version of the Great Depression. Many investors and officials are now declaring it a one-time event. I think they are whistling past the graveyard. The truth is that through a combination of globalization and technological innovation, markets have outflanked the defenses put in place 60 years ago. Bank regulators and central bankers still have no good answer to liquidity crises that crucially involve non-bank institutions, such as hedge funds, that transcend national borders. And there is a strong case to be made that this particular crisis ended too soon. Few of the factors that made the crisis possible–high leverage, herd behavior by investors, the whole problem of a global financial system without global regulators–have been addressed.
So now what? Here’s a parallel. Suppose that a thoughtful observer had looked at the United States in the early 20th century. An optimist would have been impressed by the dynamism of the economy, concluding that it represented a vindication of the capitsystem and that the world’s economic center of gravity was headed for a major shift away from Europe to this new powerhouse. A pessimist would instead have focused on the observation that financial instability was even more conspicuous on this new frontier than in older industrial economies, and that it seemed to be getting worse over time; he might have worried that this instability could shake the world economy so severely as to threaten capitalism itself. Both the optimist and the pessimist would have been right: American dynamism saved capitalism, but first, in the 1930s, American instability very nearly destroyed it.

It seems to me that the parallel works pretty well. However you look at it, Asia represents the future of capitalism–whether that future consists of unprecedented progress, financial instability on a scale not seen since the 1930s, or both. And nobody knows how it will turn out.

Paul Krugman is a professor of economics at the Massachusetts Institute of Technology

I have a theory on doing business. If my business is good, it’s not because of the weather, the time of year or the economy. It’s because of me. I’m doing something right. If my business is bad, it’s not because of the weather, the time of the year or the economy. It’s because of me. I’m doing something wrong. Somebody is always buying something from somebody, so how can I make them buy from me?

First of all, you need confidence in yourself and your merchandise with clear goals and knowledge of the products you are selling. Only then can you inspire dedication from your staff and a willingness to buy from customers.

Successful business people, no matter what their industry, have been found to share similar traits. Today’s world is no longer satisfied with simply success–we want to know how the successful get to the top. The Russians developed a concept called “anthropomaximology,” in which they try to answer the question of why some individuals outperform others. Through the years I’ve done some anthropomaximology of my own and found there are certain qualities that describe successful business people. Here are a few:

1 They constantly set higher goals Successful business people are mountain climbers who, having climbed one peak, look beyond to the next highest. They are the retailers who send 1,500 mailers to their customers and yield a good turnout of 100. But instead of being satisfied with 100, they ask how they can increase that number to 150 the next time.

For example, Donald Kelley of Kelley Frame and Art Galleries, with locations in Minnesota and Wisconsin, continually tries to improve his e-mail list. “My goal is to collect 150 new e-mail names every month and send out a new e-mail message to this list every two weeks.”

2 They avoid “comfort zones” To a successful person, standing still feels like going backwards. People who stay in their comfort zones do what they did before because it’s “the way we’ve always done it:” They run the same ads, buy the same merchandise in the same way and avoid anything new, different or unusual because they feel they might do something wrong. They blame any lack of business on the weather, the time of the year, the economy–anything except for themselves.

Successful gallery owners attend art shows, read catalogs and visit other galleries in their travels. They are always searching to find unique art exclusive to their galleries. They take control of their own destiny and market their businesses as exciting destinations.

3 They are driven by accomplishments, not money

Successful people follow the theory of Apple Computer’s founder Steve Jobs, who said, “The journey is the reward.” They are customer focused, not product focused. Their thrill is not the ringing of the register but the crowds responding to their mailing. For them, there is no greater high than a line outside the store before the doors open.

4 They solve problems rather than place blame

A telephone pole blocked the view of Ron Bishop’s Canadian gallery. He knew it would be difficult, if not impossible, to have the telephone pole moved. His solution was to paint the pole with an Impressionistic theme. Once it was finished, the local paper came, took a picture and wrote a story about it. “It was great publicity,” said Bishop. “And then the calls started coming, asking, ‘Is it for sale?'”

Successful gallery owners do not waste their time looking at problems and saying, “It’s not our fault” or “Why didn’t we …” They say, “Let’s look at what went wrong and realize it was a learning experience and figure out how we can make it work next time.”

When a customer hears it will take a week or longer to have their art framed, and says, “Sorry, that’s too long,” do you shrug your shoulders and say, “Well, that’s how long it takes.” Or do you think, “Hmmmm, if that’s what the customer wants, how can I solve their problem?”

5 They look at the worst possible scenario

“What’s the worst possible result if we follow this plan?” they ask themselves. Then, knowing that, they decide if the risk-taking is practical.

However, once they make the decision, they proceed with the confidence, knowledge and expertise necessary to make it work.

They understand the most harmful result and then decide if they can live with the outcome. If they can, they move ahead. Confidently.

Galleries that concentrate on one type of art often decide to reach into an unrelated area. Sometimes a gallery will fail in an attempt to broaden their focus, but successful performers understand even defeat is a learning experience.

“Every time I fail,” said Thomas Edison, “I learn something.” He tried 1,114 times to find a filament to stay lit in a bulb. He failed 1,113 times.

6 They rehearse the future as they see it

“I believe our future is a one-stop shop for decorating. In addition to limited-edition prints and posters, we now offer collectibles, gift items and small occasional furniture pieces,” said Christine Knoll of the Art Gallery of Hog Hollow in Chesterfield, Mo.

The year of 2004 was the third consecutive year for the depreciation of US dollar against the Euro-dollar. When entering 2005, the exchange rate of US dollar once showed a tendency of rise, however, it was still unstable.

On 30 Dec. 2005, the rate of exchange of one Euro-dollar was equivalent to 1.3623 US dollar, telling the lowest level of the US dollar against Euro in history. The US dollar began to rise to one euro against USD 1.3122 in the latter 20 days of January 2005, and kept on rising to one euro against 1.2957 US dollars in the first 15 days of February. However, the US dollar devalued sharply on Feb. 22 to one euro against 1.3260 US dollars, the lowest point since last August. It is reported that there were many reasons accountable for the depreciation of US dollars: one was that the price of oil has climbed to USD 51 per barrel; the other was the diversification for currency reserve by South Korea. People were worried that the sell of US dollar could have chain reactions upon other major powers.

Different predictions could be heard on the issue of the future trend of the US dollar. According to the experts with Merrill Lynch, one of the world’s leading financial management and advisory companies, the year of 2005 is the fourth consecutive year to see the weakening of the US dollars. The overvalued US dollar and the tight policy pursued by the US Federal Reserve are the due cause for the sluggish US dollar while other experts believed that the undercurrent that manipulated the depreciation of US dollar was quite likely being reversed. It’s impossible to see the US dollar to drop furthermore. If the global economic growth slows down, the US dollar is hopefully to appreciate.

Many reasons influence the trend of US dollar

There are many factors that influence the exchange rate of US dollar. Generally speaking, there are mainly four reasons: first, the health condition and the rate of return for investment of the US economy, secondly, the balance of international payment in the US, thirdly, the level of interest rates in the US compared with those in other countries, and fourthly, the rate of inflation. Meanwhile, there are also many other temporary pounding factors from without, such as wars, oil price, scandals from large companies as well as psychological factors etc, which are believed to have connections with former four factors.

Judging from the estimation by various parties, evident enough, many economists take the balance of international payments as the decisive factor for the trend of the US dollar. Although this kind of view is not unreasonable, it is partial. If considered from history, people will find out that the balance of international payment featuring trade deficit and current account deficit has been dominating the US economy since 1970s. But the track of the US dollar’s circulation does not show a plummet drop.

The exchange rate of US dollar used to be high for two times since the US implemented the floating exchange rate: one occurred during Reagan’s reign while the other was in Clinton’s rule. So far as Reagan’s reign is concerned, the federal budget deficit, trade deficit and current account deficit were high, but the exchange rate of US dollar was also high. It is simply because the high deficit triggered the high interest rate and high interest rate consequently resulted in high exchange rate. The trade deficit is not the result of the change of exchange rate but rather its reason. What was worth mentioning is that the surplus was realized during Clinton’s rule. But the condition of international payment hadn’t been much improved due to the low private saving rate and the exchange rate of US dollar still strong. The major reason is because of the strong growth of the US economy, low returning rate and high interest rate. Therefore, should the balance of international payment exist for a long time, it would definitely be the decisive factors for the depreciation of the US dollar. But some other factors would probably counteract its function in different periods and lead the US dollar to appreciation. This tendency is believed to be likely to happen in medium or short term.

Sharp drop of the US dollar exchange rate impossible

Generally speaking, the sharp drop of the US dollar exchange rate is impossible unless all the US dollar holders worldwide sell US dollars in large amount simultaneously, just like depositors draw money from banks during the bank credit crisis. First, the US economy still boasts the highest growth rate and strongest competitiveness among major developed countries, and other countries are still confident about the US economy; secondly, the US dollar, serving a role of a currency for international reserve, has become the natural defense for the sharp devaluation of US dollar; thirdly, since foreigners hold a huge amount of US dollars, they will suffer severe losses if they sell dollars in large amount and will not easily find a suitable substitution. Furthermore, the safety and circulation of euro, Japanese yen and gold are no better than the US dollar.

Although there is no sign of sharp drop in the exchange rate of US dollar, the possibility of gradual depreciation of it cannot be removed. In the view of Bush administration, instead of bringing harm on the growth of US economy, the orderly devaluation of US dollar can boost the exportation and narrow the trade deficit, particularly when the inflation is under control.

The calculation research finding by an American economic website shows that the current account deficit is likely to drop from current six percent to three percent if the trade weighted value of US dollar drop by ten percent. The correctness of the conclusion has yet to be proved by practice. However, the economic and financial policies of Bush administration will have a vital impact on the implementation of the idea. That is to say, if the fiscal deficit continues to increase, the current account may not shrink even though the residents’ saving rises again after a fall. Therefore, from a long-term point of view, the US dollars will face devaluation.

However, from medium and short view, the exchange rate of US dollar tends towards stability and even a moderate rise. The best result for the current account deficit is to maintain stability or slight drop, but three percent is difficult to regain. The determination and measure taken by Bush administration to reduce the fiscal deficit will exert a tremendous influence on it.

WASHINGTON – President-elect Barack Obama, relatively young and inexperienced, is facing a rapidly growing list of monumental challenges as he prepares to take the reins of a nation in turmoil.

“I do not underestimate the enormity of the task that lies ahead,” Obama said after his historic election a little more than a month ago.

It was a sobering assessment at the time, but the country’s problems have only worsened since then. Now, Obama sounds dire, particularly as he talks about the economy: “We’re in an emergency.”

He spoke during a week in which Congress killed a bailout of the failing auto industry, the government reported that jobless claims spiked to their highest levels in more than a quarter-century, and the Treasury Department said the nation registered a record federal budget deficit for November.

With woes foreign and domestic on more fronts than even Franklin Delano Roosevelt encountered when he took office in the midst of the Great Depression, Obama will be sworn in as the country’s 44th president in January.

His leadership will be tested immediately and in many ways. His performance from the outset could well set the tone for his presidency.

Not only is Obama saddled with lingering wars in Iraq and Afghanistan that he is inheriting from President George W. Bush, but he also must deal with:

_a deepening recession in the U.S. and a spreading global economic crisis.

_an automotive industry on the brink of collapse and soaring national debt.

_increasing unemployment and its ripple effects.

_the threat of terrorism amid a historic transfer of power.

At the same time, Obama may be drawn into an unfolding political scandal over Illinois Gov. Rod Blagojevich’s alleged efforts to trade the president-elect’s former Senate seat for personal gain. The ongoing federal investigation could ensnare some of his top advisers and taint the self-styled reformer who has tried to steer clear of notorious Chicago politics.

The president-elect says he’s “absolutely confident” his aides did not try to cut deals with Blagojevich, but at the very least, the scandal is a distraction for a leader facing the magnitude of problems on Obama’s plate.

Obama also has promised an ambitious foreign and domestic policy agenda that includes withdrawing most U.S. combat troops from Iraq, cleaning up government, overhauling the health care system, fighting global warming and developing alternative energy sources.

Some priorities may fall to the wayside or be done piecemeal. But, so far, he has signaled an intent to move forward on much if not all of those plans. The question is how quickly he can accomplish his goals, while simultaneously confronting the growing list of major problems.

“There’s a lot of ground giving under him. It’s a terrific challenge,” said Fred Greenstein, a Princeton University professor emeritus of politics and a presidential historian.

“From one perspective, it’s as if he’s about to take over the captain’s job on a sinking ship. From the other perspective, he could be on a glide path to Mount Rushmore if he does a combination of morale building and energizing people while dealing with the economic distress by producing some constructive changes in the society and in the economy.”

“The striking thing is he doesn’t seem scared,” Greenstein added.

Indeed, Obama exudes confidence. He has surrounded himself with people in his incoming White House and Cabinet who have decades more experience than him in government, as well as foreign and domestic policy. They include big names such as Hillary Rodham Clinton, Larry Summers, Tom Daschle and Robert Gates, longtime Washington insiders.

Comparatively, Obama has been on the national stage for a short time. He was introduced to the country during the Democratic convention in 2004 when he was in the Illinois Legislature and running for the U.S. Senate. Age 47, he will become president after serving just four years in the Senate

Most historians liken the situation facing Obama to that which confronted Roosevelt — but the comparison does not seem to do justice to the colossal challenges Obama is facing.

Roosevelt was already an established politician when he came into office at the depths of the Great Depression in a society with no safety net for the suffering. And the economy was much worse then than it is now. But he did not have two wars on his plate, nor a political scandal swirling nearby. And Roosevelt did not have a planet suffering from global warming and watching its natural resources dwindle.

He also let his four-month transition pass by keeping his distance from Republican Herbert Hoover. The two men had sharp policy differences over how to address the Great Depression, and Roosevelt stayed mum between his election and his inauguration.

Not Obama. He’s been extraordinarily active since his election.

With each new bit of bad economic news, he makes his views known — though he always is careful to defer to Bush when it’s decision time. As president-elect, however, Obama’s words now carry the power to move financial markets — perhaps even more so than those of Bush.

He has held regular news conferences to announce his Cabinet, and he gives the Democratic radio address on most weekends.

“Part of what he’s doing is paying lip service to the notion that there’s only one president while sucking up all the oxygen,” Greenstein said.

Politically, with things so bad, Obama can claim any change for the better as a success. If the economic and security situation deteriorates further, he can rightly say he inherited a mess.

Obama won the election with more than 50 percent of the popular vote, and nearly three-fourths of people in an AP-GfK poll last week said they approved of how Obama has been handling the transition.

Judging by those numbers, he has plenty of political capital to spend as he tackles the country’s mounting problems

When a Corporation´s Board of Directors decides to pay over profits or part of them as dividends, all its common shares have the right to receive them. If the board decides not to declare a distribution of dividends, shareholders receive nothing.

Companies are not legally forced to pay dividends, even when profiting, not mattering if they have done it in the past.

In contrast, companies are legally forced to pay interests to bondholders. This is an important distinction for people that depend of a regular income from their investments.

Declaration of DividendsIf receiving dividends is important for you, you should take into account these four dates:

Date of declaration is the date on which the Board of Directors declares the dividends.

Date of record is the date in which it is determined which shareholders have the right to receive dividends. Only the shareholders that own company shares up to that date have the right to receive dividends. If the shares are purchased after the record date owners of these will not have the right to receive the proposed dividends.

Ex-dividend date are two-negotiating dates before the date of record. Negotiated stocks in the ex-dividend date do not include the dividends to be delivered.

When common stocks are bought transaction takes three-negotiating dates in being completed. That is why if the record date to establish a company’s dividends is a Friday; the ex-dividend is the preceding Wednesday.

Investors that purchase such shares on Tuesday (the day before the ex-dividend date) receives the dividends because the transaction is recorded in the ownership sites for that company in three working days.

Payment date is the date on which the company pays the dividends.

Companies generally mention their dividend policies to the public. This because investors use such dividend payments in a proper or wrong way as a measure or mirror of profits expected by the companies. Changes in the dividend payments can cause major effects in stock prices than in a change in profits

This phenomena explains the unwillingness of administrations to null dividends when there is a fall in their profits. Equally, a delay in increasing dividends could occur when profits are increased due to the managing members that want to be sure they can back up any increase in dividends.

Shareholders that count with incomes coming from investments generally purchase stocks from companies that have a background of paying dividends over their profits regularly.

These companies tend to be older and more solid. Their stocks are referred to as income stocks or Blue-chip stocks. Younger companies in expansion usually retain their profits; their stock is referred to as Growth stocks. These stocks are looked for by investors interested in capital appraisal

Investment companies have reached near in relation to providing the ideal type of investment for millions of investors that do not want to manage their own investments. Managers of these investment companies invest funds from investors in varied stock portfolios, bonds and instruments in the money market.

Investors participate of these investment companies depending on the amount of their investments. Which means that even with a modest investment the investor is the owner of a share in diverse stock and bond portfolios.

An advantage of this kind of investments is that investors that do not have time to manage their own financial investments or do not have the knowledge of individual financial values can invest their money in a diversity of stock and bonds portfolios, as well as in the money market instruments that offer mutual funds. Even so mutual funds are more often being monitored by regulators (Securities and Exchange Commission and the New York Attorney General for example) because of the excessive fees charged and for using the market timing shares in some mutual funds.

This shocking practice done by some mutual funds have put them on a dilemma on whether to invest or not in mutual funds. Many of them have turned to the exchange-traded funds as a more popular investing alternative.

Money growth that are managed by mutual funds companies have made them become important pieces of the stock market. According to the Investment Company Institute by the end of 2004 the mutual funds industry had moved around a $16.06 trillion of investors capital all over the world. With that many mutual funds from where to choose the investor should be very careful when selecting a mutual fund as well as to invest in individual stocks

There are three steps that can make it easier to choose over what funds to invest in:

Understand how funds work

determine which are the objectives of the funds and what type of investments they make

Evaluate the performance of funds by reading the prospectus and other sources

Investment companies have reached near in relation to providing the ideal type of investment for millions of investors that do not want to manage their own investments. Managers of these investment companies invest funds from investors in varied stock portfolios, bonds and instruments in the money market.

Investors participate of these investment companies depending on the amount of their investments. Which means that even with a modest investment the investor is the owner of a share in diverse stock and bond portfolios.

An advantage of this kind of investments is that investors that do not have time to manage their own financial investments or do not have the knowledge of individual financial values can invest their money in a diversity of stock and bonds portfolios, as well as in the money market instruments that offer mutual funds. Even so mutual funds are more often being monitored by regulators (Securities and Exchange Commission and the New York Attorney General for example) because of the excessive fees charged and for using the market timing shares in some mutual funds.

This shocking practice done by some mutual funds have put them on a dilemma on whether to invest or not in mutual funds. Many of them have turned to the exchange-traded funds as a more popular investing alternative.

Money growth that are managed by mutual funds companies have made them become important pieces of the stock market. According to the Investment Company Institute by the end of 2004 the mutual funds industry had moved around a $16.06 trillion of investors capital all over the world. With that many mutual funds from where to choose the investor should be very careful when selecting a mutual fund as well as to invest in individual stocks

.

There are three steps that can make it easier to choose over what funds to invest in:

Understand how funds work

determine which are the objectives of the funds and what type of investments they make

Evaluate the performance of funds by reading the prospectus and other sources

Stock markets are sensible to changes such as boosting and dwarfing of interest rates, political situations, events ahead of time, and those situations that one would never think could affect the economy or markets. In addition, the same stock markets have been constantly fluctuating due that they also have to adapt to any external situation.

To get to understand those changes, and how markets work may allow you to lower transaction costs when selling or buying stocks.

The stock markets: The stock markets are the foundation of any capitalist system where titles-valuables (stocks, bonds, options, future and services) are negotiated. The stock markets in the United States have two big interchanges and a parallel market (OTC.)

The New York Exchange (NYSE) and the American Stock Exchange (AMEX) are the largest in interchange and have negotiation environs in places in which there are stocks exchange.

The NASDAQ market is the same as that of the OTC, basically negotiates new stocks coming from low capitalization companies through phone and computer net chains. The stock markets and bonds have changed significantly due to technological advances. The wide and extent use of PCs and more specifically of the internet has given investors direct access to information that before would have been almost impossible to get.. Besides negotiation schedules for investors has been broaden. While before the markets gave access to negotiations during specific schedules, today negotiations are taking place out of schedule. Interchanges still close at the end of the negotiations official day (4:30 pm Eastern US time); after hours negotiations happen via the Electronic Computer Chain Network (ECN) which starts at 4:30 pm and ends at 9:30 am (Eastern US time), time in which the markets starts operating.

NYSE negotiations are taken place by floor specialists through sound voice auctions, but the NYSE is oriented towards the use automatic systems of wide use to accept sales and buy orders as done by its opponent, NASDAQ.

One of the many advantages that internet gives investors is that they can negotiate valuables through the line without the help of an stock market agent. Another advantage of the internet is the transparence in the market price. In other words, you can see the real price which buyers and sellers are willing to bargain over determined stocks. The bond markets still have a long way to go concerning transparence that their market prices should have for their potential buyers.

The transaction cost have dropped in the use of decimals. This change has had the effect of narrowing the lowest offer and ask for an extension of 1/16 points ($0.06) to a minimum of $0.01 per stock.

Coming of computers, on-line negotiations, ample negotiation schedules and the use of decimals have turned investing in different stocks something easier, but you also need to be better informed about the valuables you are going to buy or sell so easily. The stock market’s function is to provide continuous fair prices. Buying and selling financial valuables are auction procedures. A buyer offers a buying price (the amount he or she is willing to pay) and the sellers give their selling price (the price he or she is willing to sell at.) If these prices are similar the supply and demand coming from other buyers will be brought about until they complete the negotiation

The Main Educational Ideas of my Beginner Money Investing site helps train yourself to put money aside, commit money to earn a financial return or take a business risk? Is committing money to earn a financial return the same as playing for money? It must have crossed your mind if you had committed some money every month to acquire shares of any major company during four or five years previous to filing its bankruptcy. Having tried to take some business risks cost you an arm and a leg, but if you had given it a second thought you would have committed your money to a savings account earning a 1

,3 or 2,3 annual percent during that time period. Still, during that lapse of time, the Dow Jones Industrial Average scale had raised 100% its price. Middle class property house prices had raised between 6% and 8% in that same time. Certificates gained around 6% per year. Could your possibilities to succeed be higher if you were playing at some casino or race? You may either come out naked or you may triple your cash.

Committing money in certificates, shares and/or properties is not similar to playing for money, even when shares, certificates and property prices fluctuate suddenly. Keeping money aside at home is not the same either. Contrasting ideas come from the following: Putting money aside is to keep your money worth the same when not being used. On the other hand, committing money for profit has to do with risking. Depending on where you put your cash, that is to say what kind of business, you’ll get more or less turnovers. To invest is to put money in the financial market or in real estate to increase its future value. Committing your money includes shares, bonds, real estate, options, and future contracts; savings is usually done through a bank savings account.

Speculating is putting money in a place in which opportunities to get a financial return in blue through a determined period of time are just minimum. With this investment probabilities of getting back some money over a long period of time are really high. Therefore, we can assure that investing and speculating are not the same; moreover, speculating is more related to gambling in which odds are against the individual that decides to invest. The risk of loosing in future contract investments area extremely high. For each dollar earned from commercializing future contracts you loose another one. Then, why are there who invest en speculative values? The answer is very simple. If investments work as one hopes or expects, the investors will count with a substantial turnover.

Having success in investments requires knowledge about values and stocks in which one is investing as well as the risks that those values carry. Investment opportunities are very broad and the abundant information that exists in the internet may help you get more knowledge about those investment opportunities that you feel you can carry on. The negative part that comes along with the internet is that the use of such a simple and quick that you can make investing mistakes much more easily. Without having to talk about your investing ideas to your agent o financial broker, you could end investing in low return shares and bonds, but with a higher risk of loosing it all. Advice about investments are spread freely and easily through internet. But you should take into account that no advice is free. If you had followed the advice of a research analyst having to do with which shares to buy or sell for the 2000-2002 period you would have lost most of the capital you invested. Many analysts recommended the buying of shares and stocks with very little information about those values, and only because the prices had dropped to a very low level. For example, selling shares and stocks suggestions over: Enron, WorldCom, and Global Crossing came only when they were already near to file for bankruptcy.

By understanding how to build a investing portfolio you could keep safe against any potential loss such as those shares and stocks coming from the mentioned companies and corporations.

Put money aside, commit money to earn a financial return or take a business risk?

Motives for committing money to earn a financial return

Outlay of money process

Kinds of outlays of money for profit

Reasons to Invest Money

For all those urgent reasons there are to invest maybe the most important be to broaden or increase our retirement fund for being our current life expectancy high

er than before. Nowadays, investments are the foundation of our future financial level. Bad investments can bring us negative turnovers and therefore decrease our future possibilities. You are looking at two options for your money, the first you can spend it or save it and invest it. According to the Bureau of Economic Analysis, personal savings of North Americans are very low comparing them to other developed countries. A low savings interest rate indicates that North American citizens are accumulating enough savings as to carry out successfully any emergency, and keep the life standard after retiring. Below you will find a list of why is it more important to save and invest than to spend.

People live longer than before and need more money to keep on living

Medical, educational, and insurance expenditures are still very high

The more one saves now the better his future in what having money to recycle refers to

By investing wisely you may better your life standards and increase your future wealth.

Without having to win the lottery you may accumulate an important retirement fund without having to dispose of great amounts of money. It is easier than what you can imagine. All that you need is time, money to deposit in regular periods of time and a return rate for your investments. The following arguments show how these three elements: time, money deposited and an investment rate interact in reaching your first million dollars.

For example:

An amount of US$231,377 invested during 30 years, at 5% annual interest rate, will have a future value of one million dollars.

If the return rate increases to 5 or 8%, the initial deposit will be reduced to US$99,377

A US$99,377 deposit invested over a thirty year period, at 8% annual interest, will have a future value of a million dollars

If you make regular deposits instead of investing a big amount , the sum of deposits will definitely decrease.

US$15,051 deposited each year during 30 years, at 5% per year, has a future value of US$1 million.

Earning a larger turnover reduces the annual deposit amounts.

US$8,827 deposited each year during 30 consecutive years, at 8% annual interest rate, also has a future value of US$1 million.

If you make monthly deposits instead of annual deposits the amount of each deposit will decrease more.

US$1,202 deposited each month during 30 consecutive years, at 5% annual interest rate, will result in US$1 million.

If you make weekly deposits instead of monthly ones the amounts will decrease even more

US$276 deposited weekly during 30 consecutive years, at 5% annual interest rate will also result in US$1 million in the future.

If the annual interest rate were increased from 5 to 8%, the weekly amount deposited would be the following:

US$154 invested each week at an annual interest rate during 30 consecutive years would render a future amount of US$1 million.

If we extend the investing period from 30 to 40 years and keep an annual interest rate of 8%, the weekly deposit would only be US$66.

US$66 invested weekly, at 8% annual interest rate, during 40 consecutive years would be worth a million in the future.

From these varied options we arrive to the following conclusions:

When longer the period, bigger the effects of recycling, which reduces the single initial amount or the diversified deposit amounts.

While higher the turnover interest rate, higher will be the recycling effects, which reduces the initial amount or the diversified deposit amounts.

While longer the period and higher the interest rate lower will be the single initial amount or the diversified deposit amounts.

The key to a successful financial plan is to keep apart a larger amount of savings and invest it intelligently, by using a longer period of time. The turnover rate in investments should exceed the inflation rate and cover taxes as well as allow you to earn an amount that compensates the risks taken. Savings accounts, money at low interest rates and market accounts do not contribute significantly to future rate accumulation. While the highest rates come from stocks, bonds, and other types of investments in assets such as real estate. Nevertheless, these investments are not totally safe from risks, so one should try to understand what kind of risks are related to them before taking action. The lack of understanding as how stocks work makes the myopic point of view of investing in the stock market ( buying when the tendency to increase or selling when it tends to decrease) perpetuate. To understand the characteristics of each one of the different types of investment can or may help you determine which of them is the right one for your needs.

When employees are distracted by looming foreclosures and fear of job loss, keep morale up by confronting their concerns directly

Like any issue that can suck time and mental energy away from our work, employees’ economic concerns are an elephant in the room. Job One is to address those concerns forthrightly, and often. We can’t guarantee our employees a job for life, or even for the next 12 months. What we can and must do is level with them, with as much detail as possible, about what’s happening in our firms and what the future appears to hold. We need to talk about orders in the pipeline, the state of our customers’ business, the state of our competitors. We need to address the impact of the financial industry’s woes on our own business. If senior-leadership teams aren’t convening this week to craft an internal communications strategy dealing with these top-of-mind and scary issues, they’re deluding themselves.

When Basic Needs Are Threatened

For instance, employers who have been slow to accommodate employees’ telecommuting requests should delay no more. All employers should be stretching their views of what constitutes a day’s work right now, because fuel prices have increased employees’ household expenses dramatically. If people can accomplish their work from home one day a week, this is the time to let them do it. If you’ve looked at the flex-time and flex-place concepts all summer without acting, there’s no more time for delay.

The Whole Truth

Nothing that we can invent to stimulate and reward employees—not a trip to Hawaii, not free flu shots, not even the promise of a hefty yearend bonus—can allay the fears of personal disruption or catastrophe that preoccupy our teams. No fun promotion, slogan, or contest that we dream up at a staff meeting will turn our teams’ attention away from their instinctive fears for their own economic stability—nothing except plain, unvarnished truth.

Now’s the time to open the kimono and share the company’s plans for the next 12 or 18 months; now’s the time to talk frankly about hard choices that must be made, about the leadership team’s battle plan and the associated risks and opportunities. “Just keep working, and we’ll let you know if anything changes” will not cut it, not if we want people focused on their work instead of their plummeting home value and mutual funds.

If ever there were a time to lose the corporate happy talk and be honest with employees, it’s now.

Employers who speak to what’s real for their employees—the stock market, the firm’s fortunes, and the cost of getting through the day—will earn the privilege of talking about Engagement and Missions months down the road. Those who insist on sticking to the party line may look back and see their efforts to avoid tough conversations as an exercise in rearranging deck chairs on the Titanic.

To paraphrase what one Indian CEO told me: “We’re cutting the fat, we’re being careful not to cut muscle, and we’re staying far away from the bone.” That’s good practice. Fat is something nobody can afford in lean times; bone, however, keeps the structure together; and muscle will be needed to ramp things up—and capture new business (perhaps that of less-prepared competitors)—when the economy turns.
Operations is an area that needs an especially careful look. One American CEO told me that he was surprised to learn that one of his Chinese plants was still making products at the same rate, though demand was down by more than 50% and the supply chain was “filled” with product. He called the plant manager and asked, “What’s the matter with you? Don’t you read the newspaper?” Or you might find out, as another CEO confessed, that you’re still paying boom prices for commodities and raw materials that, due to falling demand, are now selling for 20% to 50% less than they were last year. That’s giving money away.
Remember, in midsummer the average price of a gallon of unleaded gasoline in the United States was more than $4. Today it’s around $1.70. Your suppliers probably won’t come to you and suggest a price reduction. So go to them. Ask for a rebate—or ask to renegotiate existing contracts, especially since raw material costs, in many cases, are down by as much as 50% or more. And stop paying fuel and other surcharges. Prices are down; they’re no longer justified

There probably will be less competition when the recession ends. If you don’t fill the vacuum, someone else will.

Every recession—whether long and deep or short and mild—creates both havoc and opportunity. Some companies will suffer through no fault of their own. The military term for this is “collateral damage.” You don’t want to be collateral damage. You want to be the one who emerges on top worrying less about short-term valuations and more about survival, building value for the future, and the opportunities that lie ahead.

Harold L. Sirkin is a Chicago-based senior partner of The Boston Consulting Group and author, with James W. Hemerling and Arindam K. Bhattacharya, of GLOBALITY: Competing with Everyone from Everywhere for Everything (Business Plus, June, 2008).